The Boeing Company: In a Win for Employers, NLRB Dumps the “Reasonably Construe” Standard for Determining Whether Employee Handbooks’ Violate NLRA Rights

by Hirschfeld Kraemer LLP
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Hirschfeld Kraemer LLP

[author: Stefanie Renaud]

On December 14, 2017, the National Labor Relations Board (“Board”) – the entity responsible for enforcing the National Labor Relations Act (“NLRA”) – overturned a handbook standard that has been plaguing employers for more than a decade. In its place, the Board stated a new balancing test that is significantly more employer-friendly.

Background

In its 2004 Lutheran Heritage NLRB decision, the Board held that employers could violate Section 7 of the NLRA simply by maintaining handbook policies and rules that might “reasonably be construed” by an employee to “chill” protected activity under the NLRA. This “reasonably construe” standard has since been used to invalidate a substantial number of employer policies, ranging from social media policies to civility standards and even recording policies.  The plethora of decisions applying the Lutheran Heritage standard have produced widely-varying results, which has led to confusion for employers – and the Board itself – about which handbook policies are lawful. But now, those headaches could be a thing of the past.

The New Test

Using the standard announced in Boeing, the Board will now evaluate facially-neutral handbook policies and rules by balancing their potential impact on NLRA-protected rights against the employer’s “legitimate justifications” for maintaining the rule or policy. In so doing the Board will classify rules in three categories:

A rule will be classified in Category 1 (and is always lawful) if either the rule standing alone, reasonably and objectively interpreted, could not potentially interfere with NLRA rights or if the rule’s potential interference with NLRA rights is outweighed by the employer’s legitimate business justifications.  According to the Board, both the “no-camera” rule at issue in Boeing (prohibiting employees from capturing images in the workplace without approval or a “valid business need”) and the “harmonious interactions” (civility) rules at issue in a number of overruled precedents will fall within Category 1.  

A rule will be classified in Category 2 (and is sometimes lawful) if it potentially interferes with NLRA rights.  The next step under this category is to determine, based upon the facts particular to the application of the rule, whether the potential interference is outweighed by legitimate business justifications (in other words, such a rule could be legal as applied under some circumstances but not others).

Finally, a rule will be classified in Category 3 (and is always unlawful) if it infringes on employees’ NLRA rights, regardless of the individual application (and thus there can be no “outweighing” by the employer’s legitimate business justifications). The Board noted, for example, that a rule prohibiting employees from discussing their wages or benefits with each other would still fall within category 3, and would therefore be unlawful.

Notably, in overruling the Lutheran Heritage standard, the Board also explicitly overruled all cases regarding “harmonious interactions and relationships” or “basic standards of civility.”  This is good news for employers, many of whom felt frustrated by an NLRB standard that was as ephemeral as a morning fog. However, the Board was careful to note that this decision does not “pass on the legality” of other cases decided under the Lutheran Heritage standard such as Fresh & Easy Neighborhood Market (which outlawed rules requiring employees to maintain the privacy of employee and customer information), Whole Foods (which outlawed bans on video and photography in the workplace), or Costco (which outlawed rules protecting the reputation of the employer). Instead those rules will be evaluated in “future cases” using the balancing test announced in Boeing. Finally, the Board was clear to note that handbook rules created as a response to protected activity, or facially-neutral rules applied to employees who engaged in protected activity, would still be unlawful.

Takeaways

For now, employers should carefully monitor developments in this area.  We expect to see a number of future cases exploring the nuances of this standard, and possibly overruling other precedents decided on the Lutheran Heritage standard.  Employers who eliminated civility policies in light of now-overruled precedent may wish to add them back into their handbooks, but should clearly spell out the legitimate justifications that support the policy. For other handbook policies – such as social media, restrictions on cameras, and protecting the company’s reputation – employers may now maintain those rules with more confidence. However, these policies should still be supported by reasonable business justifications.  Employers are encouraged to seek the advice of counsel when adding or modifying their handbook policies.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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